New OFCCP final rules to take effect March 24

by Tammy Binford

New rules requiring federal contractors to set benchmarks for hiring veterans and individuals with disabilities are set to take effect March 24, 2014. The new regulations strengthen requirements under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act.

The new regulations were published in the Federal Register on September 24, 2013, and will go into effect in 180 days—March 24, 2014.

The VEVRAA rule requires contractors to adopt annual benchmarks for hiring veterans based either on the percentage of veterans in the national workforce—currently 8%—or on their own benchmark based on the best available data. The rule also stipulates job listing and subcontractor requirements.

The Section 503 rule sets an aspirational goal for federal contractors and subcontractors of 7% of each job group in their workforce being made up of qualified individuals with disabilities. The Office of Federal Contract Compliance Programs (OFCCP) says the rule doesn’t set a quota, but contractors will be required to take steps designed to achieve the 7% goal. The rule requires specific actions in the areas of recruitment, training, record keeping, and policy dissemination. The actions are similar to those already required to promote the employment of women and minorities.

Contractors already working under affirmative action plans as of the March 24, 2014, effective date will be allowed to keep those plans until the end of their plan year, thereby delaying compliance until the next affirmative action plan cycle. However, the OFCCP advises contractors to begin updating their employment practices and computer systems so they can come into compliance as soon as possible.

The veterans hiring benchmark will apply to a contractor’s workforce as a whole. Therefore, contractors won’t have to perform an analysis of individual job groups.

The rule aimed at getting 7% of a contractor’s workforce made up of individuals with disabilities applies to job groups of employers with more than 100 employees. Employers with 100 or fewer employees can apply the 7% figure to their workforce as a whole instead of performing a disability analysis for each job group.

After the regulations were released in August, Secretary of Labor Tom Perez said the goal of the new rules is to make the laws more effective. He said that veterans and people with disabilities “are still disproportionately represented among the unemployed and those out of the workforce entirely” despite decades-old laws prohibiting employment discrimination on the basis of veteran status and disability.

The new regulations are opposed by many contractors. Stephen E. Sandherr, CEO of the Associated General Contractors of America, said the rules “will force federal contractors to spend an estimated $6 billion a year to produce reams of new paperwork proving they are doing what the federal government already knows they are doing.”